Researchers partnered with IPA and Ghana's National Board for Small Scale Industries (NBSSI) to evaluate the impact of goal-setting as a non-monetary incentive on worker performance. The study found goal-setting increased output by 16 percent, working time and hourly productivity by 8 percent, and overall productivity of workers by 13 percent.

Small firms are a primary source of employment in low- and middle-income countries, but their growth and development are often hindered by low worker productivity. While monetary incentives like performance-based pay and bonuses have proven effective at motivating workers in high-income countries, their effectiveness in low- and middle-income settings is ambiguous. In Ghana's cassava processing sector, where labor productivity is typically low, implementing monetary incentives is particularly challenging due to resource constraints and weak contract enforcement. 

Researchers partnered with IPA and NBSSI to randomly evaluate whether setting daily non-binding production goals could improve worker productivity. The study focused on cassava peeling, the first and most labor-intensive stage of processing. The evaluation included 425 small cassava processing firms in southeastern Ghana that were randomly assigned to one of the following groups: 

• A Production group (105 firms) whose workers and owners were trained to measure and record daily cassava peeling output
• A Goals group (210 firms) that received the same production measurement training plus instruction on setting daily production goals, with no rewards or penalties tied to goal achievement
• A comparison group (110 firms) that received no training or intervention

Goal setting significantly improved worker performance. Workers who set goals peeled nearly one extra bowl of cassava per day (a 16 percent increase in output), worked about 40 minutes longer each day (an 8 percent increase in working time), and completed their work more efficiently, peeling more cassava per hour (an 8 percent improvement). These individual improvements added up to meaningful results for the businesses - on average, each worker produced an additional two-thirds of a bowl of cassava per day, increasing the firm's daily output by 13 percent.

The benefits were especially large for workers who were paid based on how much they produced, rather than a fixed daily wage. These workers increased how much they peeled by 32 percent and became 24 percent more efficient at their work. Importantly, these improvements didn't come at the cost of worker well-being - only 10 percent of workers said goal setting made them feel stressed, and workers reported being just as satisfied with their jobs as before. The intervention was also highly cost-effective for businesses that paid by output: while it cost just USD 45 to implement the program at each firm, businesses saw their monthly profits increase by USD 319.

Implementing Partner